Press Release: A quarter of young people making Buy Now Pay Later repayments haven’t been able to pay for food, rent or bills as a result, Citizens Advice has found

A quarter of young people making Buy Now Pay Later repayments haven’t been able to pay for food, rent or bills as a result, Citizens Advice has found.

New research from Citizens Advice shows 45% of 18 to 34-year-olds in the UK have used Buy Now Pay Later in the last 12 months. Alarmingly, half of these did it without realising and one in three went on to regret it.

Buy Now Pay Later is often advertised at online checkouts as an easy way of splitting or delaying payments on items such as clothing or electronics, with incentives like it being ‘interest-free’. But Citizens Advice fears for many people it can be a slippery slope into debt.

Overall, 27% of UK adults have used these firms in the last 12 months, rising to 37% of disabled people and 45% of people with a mental health problem.

The average person was repaying £63 a month. But Citizens Advice found almost two in five (5.7 million) who’ve used Buy Now Pay Later in the last year didn’t think it was ‘proper borrowing’ and six million didn’t fully understand what they were signing up for.

The charity is warning that four in 10 of those who’ve used Buy Now Pay Later in the last 12 months are struggling to repay. It found a quarter of consumers regretted paying using these platforms, with the most common reasons being spending more than they can afford, and paying more than they expected.

And repayments are not the only problem, with three in 10 Buy Now Pay Later users saying they’ve been charged a fee they didn’t expect.

In a separate survey of 280 of the charity’s frontline advisers, more than a fifth said they had advised or were aware of people with Buy Now Pay Later issues, with just over two-fifths of these seeing an increase since the start of the pandemic.

‘I’ve been barraged with calls, emails, and letters from a debt collector – all for buying some clothes online’

Case Study

One client bought £600 worth of clothes and used a Buy Now Pay Later firm to pay in installments. They didn’t receive the goods and so cancelled their payment to the firm while they waited for the issue to be resolved by the retailer.

They said:

“The whole thing has been so stressful. I’m constantly on edge. I’ve just been barraged with calls, emails, and letters from a debt collector – all for buying some clothes online.

“The firm said they were referring me on to someone and I had no idea it was a debt collector. I had no idea that Buy Now Pay Later could impact my credit score.

“I’ve never had issues shopping this way before. But this time it’s like as soon as something went wrong they’ve washed their hands of me.”

Citizens Advice believes Buy Now Pay Later firms must overhaul their checkout processes, to ensure shoppers aren’t encouraged to spend more than they can afford, and improve affordability checks. Customers must also be treated fairly if they are struggling to repay and be able to escalate problems to the Financial Ombudsman Service.

The charity will share its research with the Financial Conduct Authority, as it decides how Buy Now Pay Later firms will be regulated.

Nicky Willshere, Chief Officer at Citizens Advice Ipswich, said:

“Buy Now Pay Later borrowing can be like quicksand – easy to unwittingly slip into and much more difficult to get out of.

“It shouldn’t be possible for people to sign up for credit without realising, and the fact this is happening so often signals that a drastic overhaul is needed.

“This industry more than trebled in 2020, and while these products work for many shoppers, the regulator has rightly recognised the potential for harm. It must ensure robust consumer protection keeps pace with changes in how we shop.”

Press Release: Citizens Advice now helping one renter every minute as eviction ban just “papering over the cracks”

New research by Citizens Advice shows the charity is now helping one person every minute with problems relating to renting from a private landlord.

In the first two months of this year, the charity saw a 40% increase in people seeking one-to-one advice on issues relating to the private rented sector compared to the same period in 2020.

A year ago, the government announced a ban on most eviction proceedings. That ban was extended several times and is in place until May 31st. However, its conditions have been altered so tenants with more than six months’ rent outstanding can now be served with an eviction notice. This includes people who have built up arrears during the pandemic.

Polling by Citizens Advice, through its national Tenants’ Voice panel, shows private renters are still concerned by the threat of eviction despite the ban. A third said they had been worried about the issue in the last three months.

Figures from the charity’s website show in the first two months of the year 69,000 people viewed its advice pages dealing with problems related to private tenancies.

Citizens Advice also helped 16,530 people with one-to-one advice on these issues in the same two-month period. That’s one every minute during office hours. This includes:

4,781 (29%) who had problems with repairs or maintenance
1,541 (9%) who were worried about possession action not related to rent arrears
848 (5%) who reported harassment by their landlord
670 (4%) who wanted help with a possible illegal eviction.

The Tenants’ Voice panel also found two thirds of those surveyed had experienced problems with maintenance or disrepair in the last three months.

Case study:

A teaching assistant, who is the single parent of a toddler, and who also cares for her disabled father who lives with them, came to Citizens Advice for help when she was issued with a Section 21 eviction notice by her landlord after complaining about maintenance problems. This included extended periods without heating or hot water.

She has paid hundreds of pounds out of her own money for repairs. This has left her struggling to afford the rent and her landlord has said he’s charging her 8.1% interest a day for late rent.

She said:

“I have had to wash up in the bath, wash my daughter’s clothes in the bath. She has woken up cold in the night, it’s been a nightmare. Previously we always paid our rent 100% – even throughout the pandemic.

“I’m a wreck. I can’t sleep. I am up every night at 3am in the morning and throwing up worrying about it. I have until the end of May to find somewhere to live.”

Opportunity for change:

Citizens Advice says the forthcoming Renters’ Reform Bill is an opportunity to lay the foundations of a more equitable private rented sector. The charity wants:

An end to Section 21 ‘no fault’ evictions – as promised by the government in 2019
Indefinite tenancies used as standard, to give renters more certainty and flexibility, and reduce their exposure to annual rent increases.
A new National Housing Body and register to set consistent standards, give tenants greater protection, and help responsible landlords

Nicky Willshere, Chief Officer at Citizens Advice Ipswich, said:

“The government’s eviction ban helped private tenants feel more secure during the pandemic. But it’s been a case of papering over the cracks.

“Our research paints a disturbing picture of a private rental market in which tenants pay high rents on badly maintained properties, while living in constant fear that any complaint could result in summary eviction.

“The Renters’ Reform Bill is an opportunity to lay better foundations for a more equitable private rental market which provides better quality housing and helps tenants feel more settled in their homes.”

Press Release: Money doesn’t always buy you the best energy supplier, warns Citizens Advice

Ahead of Ofgem’s price cap increase, the latest edition of the Citizens Advice star rating (http://bit.ly/CitizensAdviceStarRating) – which ranks domestic energy suppliers on customer service – reveals that money doesn’t always buy good service.

Citizens Advice analysis shows expensive doesn’t always mean good and cheap doesn’t always mean bad. Of the 20 cheapest deals with energy suppliers, only five tariffs are with suppliers in the bottom third of the star rating table, whereas 10 tariffs are with suppliers in the top third.

With the energy price cap having been increased by £96 to £1,138 from 1st April 2021 for default tariff customers, the charity is encouraging people to consider switching suppliers to get a better deal. Doing so could save an average household up to £200 a year and secure a supplier with better customer service.

Citizens Advice research shows that nearly a quarter of energy customers – equivalent to over six million households – are worried they’ll struggle to pay their energy bills because of the pandemic. With bigger winter bills arriving in the coming weeks for many customers, it’s critical that people are able to easily access support from their supplier. The charity is calling on poor performers in the star rating table to improve their customer service – including tackling billing errors and difficulty in contacting suppliers.

Nicky Willshere, Chief Officer at Citizens Advice Ipswich, said:

“At a time when so many people are facing job losses and financial trouble, it’s unacceptable that energy bills are another source of stress. With the rise in the energy price cap, many will have to pay more and rightly expect a decent service. Suppliers must step up to give their customers what they deserve.

“Everyone should consider whether they are getting value for money from their supplier – paying more doesn’t always mean you will receive a better service. Don’t put up with it if it’s not good enough. Shop around if you can.”

Case Study:

A dad-of-two started receiving high energy bills when the family moved home in May last year, but his energy company didn’t respond when he tried to question the amounts.

He said:

“In October, I got a bill for £3,000 too much. I contacted the Citizens Advice consumer service and they helped me put in a formal complaint. The bill was sorted and everything was okay.

“Unbelievably, in January this year, another bill came for £650. I was so shocked. I have been contacting the company since January and no one has called me back or replied to my email.

“I’m so frustrated at the amount of time I’ve spent chasing, and nothing has been done. I thought it had been resolved.”

18 people helped every minute: What Citizens Advice data shows about the year everything changed

Citizens Advice is warning that debt is the looming problem of the pandemic. As the one-year marker since lockdown began approaches, the charity has charted a worrying increase in the need for advice, food bank referrals and charitable grants.

The charity’s 12 months of pandemic data maps the waves of demand for different types of advice during its busiest ever year (1). In this time, there have been more than 60 million views of its self-help advice pages, and its frontline advisers have given one-to-one advice to two million people – 18 people every minute.

Fuel debts and CCJs. The number of people wanting debt advice dropped sharply during the first lockdown. Emergency protections meant they could postpone seeking help while they tackled more immediate day-to-day issues. Since June, the numbers have been steadily increasing. There have been steeper rises in the need for charitable support, help with fuel debts and searches around County Court Judgements (see graphs one to three). Without further interventions, Citizens Advice expects debt issues to increase.

Wills. In a stark reminder of the human cost of this pandemic, the charity also saw a big rise in views of its web pages on wills and deaths. An acute increase during the first wave of the pandemic was followed by an even greater increase during the winter lockdown, mirroring the higher death toll of the second wave.

Redundancy. In terms of redundancy, Citizens Advice saw a staggering increase in the need for help throughout the first lockdown, but this nosedived as the initial extension to the furlough scheme extension was mooted (see graph four).

People’s questions about the furlough scheme also changed. From March to May 2020, they were largely around working and being made redundant while on furlough, but as people became used to the scheme the questions changed to getting a second job. As the third lockdown and homeschooling took hold, the focus was instead on if people could ask to be furloughed (see graph five).

Universal Credit. Demand for the charity’s Help to Claim Universal Credit service mirrored the initial surge in applications for the benefit, which flattened from May onwards. During the past 12 months, Citizens Advice has seen a change in the people seeking support with applications, with women and under 35s making up a bigger proportion, but a fall in the proportion of disabled people.

The charity, which was formed in response to the outbreak of World War Two, was already offering remote advice before the pandemic, and so was well-placed to adapt as the crisis took hold. In 2020 it helped 77% more people by phone, 83% more by webchat, and 41% more by email compared to the previous year.

Nicky Willshere, Chief Executive of Citizens Advice Ipswich, said:

“Our data shines a light on how people’s worries and fears have changed throughout this pandemic.

“It has given us early warnings of the problems ahead, and that alarm is now signalling the return of debt problems as people deal with the fallout of job losses, lower wages and less stability.

“Behind the numbers are the individuals who have been buffeted by a wave of problems triggered by the pandemic. Our frontline advisers will continue to be there to support them, but as a nation we must ensure no-one is left behind on the road to recovery.”

The stories behind the data: ‘I can’t always afford food – I’m worried about how I’ll survive’

Lisa, 43, has worked in the travel industry for most of her life, but in March she was told to shield and furloughed. In October, she was made redundant when her team was cut from nearly 50 people to five.

She said: “For the first time in my life I had to apply for benefits. My Universal Credit and Jobseekers’ Allowance doesn’t cover all my bills. There’s always something that
I’m not able to pay in full. I’m now in council tax arrears and I’m behind on a loan.

“I can’t always afford food and I’m really worried about how I am going to survive.

“Citizens Advice has helped me access energy and food vouchers and are helping me with my debts.

“I apply for jobs everyday but for every job there’s about 100 people applying. It’s such a difficult time and I just hope that I can get a job and get my life back on track.

‘Our daughter pays our energy bill but we’re still left with nothing once we pay the others’

In 2019, Kish left her job to become her mum’s full-time carer. Her husband’s earnings as a self-employed security worker covered their outgoings, but in March 2020 his work dried up.

She said: “At the end of April we realised that my husband wouldn’t be getting any work, so out of sheer desperation we applied for Universal Credit.

“When we received our first payment we realised that we wouldn’t have enough money to pay all of our bills and buy food.

“We had to turn to one of our children who is fortunate enough to be working and ask for help. Our daughter started paying our energy bill but we are still left with nothing once we pay everything. We’ve cut back on everything, we don’t buy treats, haven’t bought new clothes, nothing!

“As a result of having such a drop in our income we are now in rent arrears of just under £800. Thankfully our housing officer is understanding and has set up a repayment plan of £10 per month.”

graph 1

graph 2

graph 3

graph 4

graph 5

Press Release: Price control is a win for consumers, says Citizens Advice

Citizens Advice has responded to today’s announcement by Ofgem about the next price control for local electricity networks (DNOs), known as RIIO-ED2.

Nicky Willshere Chief Executive of Ipswich Citizens Advice, says:

“In the face of appeals by other energy networks over their price control, Ofgem has stood its ground by continuing to limit shareholder returns. This is a win for consumers. Energy networks have made billions in excess profits during the current price control and it is vital this isn’t repeated.”

Background

Citizens Advice research (http://bit.ly/EnergyConsumersMissingBillions – July 2017) showed that energy network companies were able to overcharge energy customers by £7.5bn during the current RIIO-1 price controls.

Citizens Advice previously established five principles (http://bit.ly/CitizensAdviceRIIO-2Frameworkconsultationresponse) which it believes need to be met if the RIIO-2 price controls are to deliver for consumers.

Press Release – Six-month extension to Universal Credit uplift ‘kicks the can down the road’

Citizens Advice has responded to an announcement in today’s Budget that the £20-a-week increase to Universal Credit will be extended for six months.

Nicky Willshere Chief Executive of Ipswich Citizens Advice, says:

“It will be a huge relief for people on Universal Credit to not face a cut to their benefits next month. But with a challenging recovery ahead of us, this is a stopgap.”

“A six-month extension kicks the can down the road, only to leave millions facing a financial cliff edge in the autumn.”

“We urge the government to think again. The Universal Credit uplift must be kept for at least a year to help people pick up the pieces from this crisis.”

Press Release – 16.5 million people hit by letter delays in January, finds Citizens Advice

Almost one in three people across the UK experienced a delay in sending or receiving letters during January 2021, new research by Citizens Advice has found.

The charity has had people get in touch with concerns that missing mail has seen them unable to pay bills, apply for benefits, and receive vital support from the charity’s advice service.

The charity also found that 7% experienced serious negative consequences of struggling to receive post, like being unable to pay a bill, or missing a GP appointment or job interview. This doubled (14%) for those who were self-isolating or shielding.

Citizens Advice has also seen a 365% increase in the number of people looking for advice on Royal Mail delays on its website in January, compared to January 2020. Indeed, some of the most affected by postal deliveries have been from the South East (36%).

Nicky Willshere, Chief Executive of Citizens Advice Ipswich, said:

“We know Royal Mail have faced new pressures during the pandemic, and postal workers have worked tirelessly to ensure we can all stay connected. But letter delivery is a vital public service, relied on by many for bills and other critical information.

“Ensuring that people are able to receive letters at least once a week will provide reassurance to millions. We also urge Royal Mail to provide more transparency to people about what they can expect.”

Citizens Advice, the consumer advocate for the postal sector, is urging Royal Mail to ensure that letters are delivered weekly as a minimum, that delivery returns to normal levels as soon as possible, and that people are given clear information regarding how long delays could last in their area.

Price cap rise will be ‘heavy blow’ to household finances already hit by Covid

From 1 April 2021, Ofgem will introduce a new increase in the energy price cap, which will see it increase by £96 for default tariff customers, and by £87 for pre-payment meter customers.

According to Ofgem, default tariffs and pre-payment meters are already some of the more expensive energy options, and research shows that pre-payment meter customers are more likely to be living in fuel poverty.

However, Nicky Willshere, Chief Executive of Citizens Advice Ipswich, adds that this rise not only comes during a “tough jobs market and essential bills rising”, but also the rise will come “at the same time as the £20 a week increase to the benefit is set to end”. The £20-a-week increase to Universal Credit and Working Tax Credit is set to end on April 5.

To visualise the twinned effect of the price rise and the cut to the Universal Credit boost, the £20 uplift would cover nearly a whole week (six days) energy costs for a below average income household.

Indeed, in December, Citizens Advice research showed that 2.1 million households were behind on their energy bills, 600,000 more than in February 2020. That was with the reduced energy price cap and the £20 uplift. This could affect many of our clients, because since 1 March 2020, Citizens Advice has supported more than 350,000 people with Universal Credit.

As such, Nicky Wilshire argues that “now is not the time for the government to cut this vital lifeline”.

More than one in six struggling to afford broadband

More than one in six people are struggling to afford their broadband during the third lockdown, Citizens Advice has found.

This comes at a time when people are more reliant on broadband to work, teach their children and order essentials.

Citizens Advice found that during the first lockdown, certain groups, including people with children, disabled people, people from Black, Asian or ethnic minority backgrounds, those who were shielding and young people were particularly struggling with their broadband bill.

It also found broadband customers in receipt of low-income benefits such as Universal Credit were almost twice as likely to struggle to pay their bill as other customers.

Towards the end of last year, an estimated 2.3 million people had fallen behind on their broadband bill, according to the charity.

In December, regulator Ofcom found that if households were paying the average £37 a month for landline and broadband, this would take around four times the proportion of a low-income household’s budget, compared to an average household.

It “strongly urged” all providers to consider offering cheaper tariffs for those on a low income or who are struggling financially.

Citizens Advice is calling on the government and Ofcom to fast-track these plans by making it compulsory for all providers to offer affordable tariffs to people on low-income benefits. Only three of the largest 13 firms currently offer these tariffs.

‘I can’t afford broadband, so when my mobile data runs out I can’t see my grandkids. Do you know how heartbreaking that is?’

Maxine, who lives alone, had to claim Universal Credit in March when her work in the hospitality industry stopped.

She said: “Throughout the lockdown the only way I’ve been able to see my elderly parents, and most of my grandkids is on video calls. I don’t have broadband as I can’t afford it, so when my data has gone I can’t see them anymore. I’ve missed family games nights on Zoom.

“Do you know how heartbreaking it is to not be able to see them? It’s really isolating just being alone. There were times where if I ran out of data it would be weeks until I saw another person.”

She isn’t eligible for any free data boosts, such as those offered as part of the government’s ‘Get Help With Technology’ scheme to help those with children who can’t afford to get online.

Previously she would go to a friend’s house to use the internet. She added: “I’m literally being penalised for not having access to the internet. Most things nowadays are online: food shopping when I was isolating, applications, checking my Universal Credit account, getting the best deal for gas and so forth. And so when you don’t have access to the internet you lose out as they put all the best deals and information online.”

‘Without access to the internet people are effectively locked out of key services’

Nelleke van Helfteren, Citizens Advice Ipswich, said:

Broadband allows people to be part of society. So much of the support is now online, as well as job applications, job interviews and benefits claims. Without access to the internet, people are effectively locked out of key services and everything they need to live a full and proper life.

But for people on welfare benefits, every single decision about how they spend £1 can make a difference. Broadband can be incredibly expensive.

Nicky Willshere, Chief Executive of Citizens Advice Ipswich, said:

“The pandemic has cemented the fact that broadband is an essential utility. It is not a luxury for those who can afford it.

“Without broadband we struggle to teach our children, order food and medicines, work, search for a job or claim Universal Credit.

“While the government has provided free laptops and mobile data to help children study at home, these are ultimately just a sticking plaster. To tackle the digital divide, it must take urgent action to ensure everyone can afford their broadband, no matter which provider they are with.”

Vacancy – Technical Debt Team Supervisor (Money Advice Team)

Citizens Advice Ipswich
Technical Debt Team Supervisor (Money Advice Team)
Salary: Negotiable – dependent upon relevant skills and experience
Hours: 37 hours a week (full-time)

An exciting opportunity has arisen to join Citizens Advice Ipswich as the Technical Debt Team Supervisor for the Money Advice Team, at 19 Tower Street, Ipswich. This role will supervise, coach, and develop the money advice team including performance, workflow management, and quality of advice offered to clients. The role will also include direct casework, requiring current relevant debt management/advice experience.

To be successful in this role you will be a competent, experienced money advice/debt team supervisor, able to support and coach team members to perform within a quality-based advice framework. You will have a sound understanding of debt management options (including bankruptcy, insolvency, Debt Relief Orders), be able to manage your own casework, and maintain the relevant CPD/technical supervisory standards required. You will be able to work within a pressured environment with excellent client-facing skills, presenting, and conducting yourself in a professional and courteous manner. You will have the ability to support and drive continuous improvement initiatives to develop money advice team processes. You will be able to interpret and report on client volumes and insights to support the organisations Social Policy and campaigning activities. You will have a professional and supportive demeanour and be able to work as part of a diverse team.

If you think you would fit the description above and would like to join our dedicated and professional team then please contact us for an application form at training@ipswichcab.org.uk

If you would like to talk about the role, please contact Margaret Vane: Citizens Advice Operations Manager 01473 932320.

Closing Date: Friday 12 th February, 2021 Interview Date: Friday 19 th February, 2021